“We will put the prevention of financial risks at a more prominent position to make sure there won’t be a systematic financial crisis,” Guo Shuqing, making his first public appearance as chairman of the China Banking Regulatory Commission (CBRC), told scores of reporters packed into a briefing room.

The 60-year-old Guo, in his third day on the job, said he is determined to remove “chaos” from the regulatory system to “safeguard” the health of China’s 232 trillion yuan ($33.7 trillion) banking sector for “the country and the people”.

“Different regulators, different laws, different rules have caused some chaos,” Guo said, adding that CBRC is collaborating with other regulators to create a framework to close loopholes in rules for cross-market financial products.

Guo also said CBRC will curb the expansion of banks’ off-balance sheet business and tighten oversight of their nearly 30 trillion yuan in wealth management products (WMPs).

Over the past five years, China’s banking assets have more than doubled, even as the economy has slowed, as stimulus brought an explosive growth of debt. Non-performing loans at commercial banks totaled 1.51 trillion yuan at the end of last year, the highest since 2005.

Risk prevention is expected to be a key theme at a meeting of China’s parliament starting on Sunday.

Guo’s comments come a day after President Xi Jinping told top policymakers that China must “unswervingly” crack down on financial irregularities and illegal behavior, while improving its market supervision.

PROPERTY DEVELOPERS WARNED

The regulator addressed questions related to the rapid asset deterioration at commercial lenders and increased risk associated with a potential housing bubble.

Prices of new homes jumped 12.4 percent last year, the fastest rate since 2011. Since October, more than 20 cities have introduced property curbs to cool the market.

Mortgage lending accounted for about a quarter of bank credit and nearly half of last year’s new loans, Guo said.

Guo warned banks to “prudently” manage loans to property developers.

“We pay close attention to the risk of a real estate bubble,” he said, adding that while the leverage ratio of mortgage loans is not too high, rapid mortgage growth is a concern.

The CBRC will restrict lending it suspects is being used for property speculation, Guo said.

NO MODELS YET

Asked what role he’ll play in China’s expected financial regulatory system reform, Guo said he didn’t yet have a chance to think about it and shifted the topic to his just-ended years as governor of the eastern province of Shandong.

“Until last week I was thinking about my work in Shandong,” Guo said.

“If you ask me about models we can use to upgrade toilets in rural China, I could tell you three models. But speaking about regulation (reforms), I have none so far,” Guo joked.

In response to speculation he will lead Beijing’s efforts to unify China’s central bank with regulators overseeing banking, securities and insurance, Guo labeled it “rumor”, without elaborating.

While a sharply higher number of defaults are expected by analysts this year, Guo said progress is being made in reducing heavy corporate debt burdens.

More than 430 billion yuan ($62.5 billion) of debt-to-equity swap deals had been signed as of early February, he said.

DEBT ‘UNDER CONTROL’

Separately, CBRC vice-chairman Cao Yu said China established 12,836 creditor committees by the end of last year, to help manage credit of 14.85 trillion yuan.

Creditor committees allow lenders and debtors to negotiate their debt on their own, in order to seek best debt solutions for troubled firms, according to Cao.

“The systematic risk of the banking sector is under control. The systematic risk of China’s financial industry is also under control,” Guo stated.

China’s debt-to-GDP ratio rose to 277 percent at the end of 2016 from 254 percent the previous year, with an increasing share of new credit being used to pay debt servicing costs, UBS analysts said in a recent note.

Some economists argue that other countries which accumulated debt as rapidly as China have ended up facing a financial crash soon afterwards. The Bank for International Settlements says China’s banking sector could face a crisis within three years.

The Reuters graphics team has produced an interactive guide to the major aspects of China’s debt issues, including rising household debt, potential property bubbles and rising corporate debt. See (tmsnrt.rs/2hMAvzX)